This is the process of determining which piece of equipment best fulfills the business requirments that have been identified and documented. Sometimes this may be purchasing an off the shelf piece of equipment or sometimes the design and build of a custom piece of equipment is a better business solution.
Factory Acceptance Test
This is when basic functional testing is performed to ensure that the requested design topics have been met and perform to specifications. It is normal for a vendor to allow the purchasing company's Validation & QA departments to have inputs as to what to include in the FAT.